In recent years, governments across Southeast Asia have prioritized the development of increasingly large areas of industrial tree
plantations. This emphasis has been driven by the region's rapidly growing demand for timber and industrial wood fiber, particularly
from China. This growing demand could accelerate considerably over the medium term in response to the region's expanding market for
biofuels and a planned new wave of pulp mill capacity expansions.
Two of the region's most ambitious tree-planting programs are currently underway in Vietnam and Indonesia. Initiated in 1998,
Vietnam's "Five Million Hectare Reforestation Program" aims to increase the nation's forest cover to 43% by 2010. Two million hectares
are targeted to supply raw materials for pulp mills and other wood processing industries. Large numbers of farmers are now engaged in
tree-planting shemes, partially funded by KfW, the World Bank, and the Asian Development Bank. The Indonesian government now seeks to
establish 9 million hectares (ha) of new industrial tree plantations by 2016, in addition to 9.8 million ha already allocated for this.
Sixty percent of the new area are scheduled for conversion is to be planted by smallholders. It is expected that some 360,000 rural
households will be directly involved in developing plots of 15 ha each, with several hundred thousand more providing wage labour for
In both countries, governments are promoting smallholder plantation development as a strategy for alleviating rural poverty. If well
implemented, such programs could provide income opportunities for large numbers of rural households, while also increasing (or restoring)
the productivity of degraded lands and developing sustainable raw material supplies for wood processing industries. On the other side, such
programs can also increase inequality, making conditions worse for the very poor; marginalised groups, and women.
Past experience with smallholder tree-planting programs in Indonesia, Vietnam, and other countries suggests that such initiatives carry
considerable risks. In many areas, they have led to the displacement of communities with customary tenure rights; loss of newly allocated
land rights through land lease markets; as well as marginilization of rural poor who depend on access to common property resources. Also,
inequitable power relations and poorly governed rural institutions have frequently resulted in disproportionate benefits from tree planting
schemes flowing to large-scale corporate actors and/or local elites. Further on, rural smallholders have limited technical information about the
most appropriate tree species to plant on sites they manage and the types of silvicultural practices that will generate optimal yields. Their
acces to markets is often limited by the dispersed nature of their operations, and the general abscence of economies of scale and lack of
coordination to gain market access.